Help, please: Pricing work.... formulas please!!!

This is how i figured the price.... advice needed or am I doing it ok? thoughts please.
knife= 180 + 20% =$216
gold wire 65 +20% = $78
labor 10hours@ 35per hour = 350
20% markup .... price of knife =$772.80

seem logical but also seems like to high of price for the knife.

20% markup/profit margin is good, but it appears you've doubled it on the knife and gold wire. Wouldn't a straight 20% be:

knife= 180 + 20% =$216
gold wire 65 +20% = $78
labor 350+20% =$420
total: $714.00

ah ..yes thank you... thats a little better...

griff silver said:

This is how i figured the price.... advice needed or am I doing it ok? thoughts please.
knife= 180 + 20% =$216
gold wire 65 +20% = $78
labor 10hours@ 35per hour = 350
20% markup .... price of knife =$772.80

seem logical but also seems like to high of price for the knife.

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Personally, I leave the knife where it is, triple the actual cost of the gold (including any lost in clean-up) and add my labor.

knife= $180
Gold 65x3= $195
labor 10@35=$350

$725.00

If I don't feel thats anough I can add on to that. The big unless is if you were able to get the knife below cost, then you value it at retail. I do it this way because people can look at the knife and find a ready price. Most people don't really know how to value gold, but in the jewelry trade it is routinely marked up 3X (called triple key[stone]). Personally, because of the store, I price my per hour higher...it has been $40, but I'm considering raising it to $50/hr. I then get the final price and adjust it up or down. I don't like 299.99, or $303.00 etc. If it is just over a mark (like $700) I either drop it a few dollars or raise it a few, depending on the piece, how I feel it looks, where I am holding my tongue and a whole bunch of little stuff!

my formula is real simple-- the total cost of doing business-- phone, utilities. materials and time. time is actually based on travel, drawing, specialty fixturing, etc,etc. the time can be a bugger for newbies. the ever-present nagging question-- what is my time worth ? very early on, i began using a stopwatch. actual time on the job, in all its' aspects were taken into consideration. after a few years, i could come really close to a price quote without eating a loss. all your equipment has value. even if you made an item yourself. my simple way of pricing can actually become a pita, unless it is used consistently on every job you do.

You have the right idea in doing a spec knife, however you need a better brand of knife unless you have peoe who REALLY want those in particular.
Then, you need a price , not a formula, because, your clients only want the price and will never understand a formula, and they will inevitably bring you the next one at the same price.
And if you use a formula, when they ask how much, you will hesitate and start looking for pen and paper , generally appearing disorganised and as if you dont know your own pricing.
Looking at your figures and what you seem tou feel you are worth, i would say make your price$1000, just for the engraving.
You could say $1500 for interframes.
Personally, i would just start at five grand.
That way, whatever they want, you just say five grand.
If you dont get work at that price, it just means you need to meet more people.
And if you dont sell a knife at a show, put in in the safe, to sell in the future and do another for the next show.
Wouldnt you rather have an unsold $ 5000 knife than an unsold $772 knife?

I like your logic Barry!

And I think it helps the mindset to decide up front that you're going to be making a five grand knife.

I don't think I'm at that level right now, but I still like the mindset.

One formula i was told years ago by a very accomplished engraver was...........If you have a big backlog you are too cheap. If you have no backlog then you are too expensive. Push the envelope a bit and see what happens. you never know

Value your own skills, be confident, tell them your price.........and then close your mouth. And keep it closed.

There is no virtue in working for nothing and constantly being on the breadline. You can work at McDonalds and do that.

Cheers
Andrew

Andrew Biggs said:

Value your own skills, be confident, tell them your price.........and then close your mouth. And keep it closed.

There is no virtue in working for nothing and constantly being on the breadline. You can work at McDonalds and do that.

Cheers
Andrew

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Actually, here in Washington State, minimum wage is $10/hr. I would probably make more at McD's if it was full time! LOL

The price is determined by a willing seller and a willing buyer, it also will be market based for your area. In some areas art is valued high and the artists/craftsmen can get just about anything, including sometimes unreasonable prices. In other locations around the country, art is a low priority, you may have take what is offered an d be satisfied.

As to an hourly wage, I think your individual reputation has a lot to do with how much you can charge per hour. Your experience and abilities also come in to play. A newbie still in the learning process may take 40 hours to do something that a long time engraver maybe able to complete in 2 days and do a better job than the newbie does. Out of the 2, the experienced person with a good rep can command a higher price than a newbie like myself.

I make game calls, some duck but specialize in predator or coyote calls. I know my customer base, they like simple, functional and CHEAP calls at less than $20 each. If I tack on $2 or $3 and my sales will drop, like a hot rock. But I also know they want quality, but are not particular about the types of wood I use, so I can get away with walnut, cherry, maple etc.. Those sell for $18, occasionally a customer asks for something special, I upgrade the wood, and the external design, and I can get $30 or $40 for those.

I see the newbie callmakers look at mine and then try to sell at the same price, the soon realize that they cannot sell them at my prices, people will not buy them because they are unknowns as callmakers. I also see some that try to undercut the price to get sales, drop the price to $10 and they will sell like hotcakes for awhile, but after the buyers realize the newbie doesn't have the good sounds that I have the customers come back to me.

By the way, those field grade calls, I can crank one every 15 minutes when I set up and make them in bulk of 48 calls at a time. But it is as boring as hell, to drill out 48 blanks with a 3 step drilling process in each one, and then turn and sand 48 call bodies. Then the 3 step application of finish. It isn't fun anymore. But it pays for my other woodturning expenses, so I can spend a week on one call that I may or may not sell or keep for special people or even good customers.

I also have the benefit of being retired, I don't support myself or family with this income. It is MAD money, to buy more "toys" and supplies with.

That keep it closed advice from Andrew is good you need to let them have time to think and say YES!

barry mentioned about "formula". when quoting, i don't flounder around, or appear confused. look the client in the eye and give your price. those that seem hesitant on my price-- well, they're free to accept or reject. either way, it always ends in a hand shake-- again, looking the dude square in the eye ! 3"f's"-- friendly, fair, above all-- firm ! if you back down on a quote, you'll develop a flea market reputation.

I found it to be fairly simple to determine price.....give them your set price and if they don't hesitate, you're too low. Raise your price for the next project and keep raising it until they blink. If they blink and pass, don't lower the price as they will eventually come around. Then, and only then, have you determined your value in your area.

Bill

griff silver said:

This is how i figured the price.... advice needed or am I doing it ok? thoughts please.
knife= 180 + 20% =$216
gold wire 65 +20% = $78
labor 10hours@ 35per hour = 350
20% markup .... price of knife =$772.80

seem logical but also seems like to high of price for the knife.

Click to expand...

You basically sell an engraved knife for 4 times the value of the same knife not engraved, why not one can always try. When it come to spec job one need to choose his battle, let say you want to do a spec job on a Ruger Red Label, you pay $1500.00 for the gun, what are the likelihood of selling the finish product for $6000.00, I would say, null. Even so a Red Label is a good gun it is not collectible not valuable enough to command that price. Now take a Browning over under (Belgium) you may pay $1500.00 for a used gun, an other 1500.00 for restocking (stock are available ready to go), you do the same work than you previously did on the Ruger Red Label, and you have reasonable chance to sell it for $9000.00, you made the same profit, spend the same amount of time but one spec is sellable the other is not.
Not every item can stand upgrade, their base perceive value and desirability will dictate their "upgrability". A Chevette with a $10.000 set of wheels is still a Chevette. "Expensive" guns, knives, watches, etc, are upgrade because the multiplier between the base value of the item and the final cost is reasonable, a $50.000 job on a Boss is reasonable the same job on an Arrieta is not, few engravers will command a 4 times increase of the basic cost of an item.
One last point, you ask about the pricing of your work but you are not actually selling your work, you are selling an engraved knife with your work on it, even if your charges schedule is adequate, the final cost is too high because the value of the item is too low. Of course I shall not mention that you take an additional 45% on the value of the knife and an extra 20% on the value of the gold (isn't 300% markup enough ?), you also forgot taxes (you sell goods you are now a retailer) at 5%, your knife is now over $800.00.
Please prove me wrong!!!

YEP I agree

thanks guys!?! kinda sorry i ask.

I'm certainly glad that you asked the question griff! Because I believe that the item to be engraved has absolutely nothing to do with a command of price for work that has been commissioned.
The intrinsic value is wholly in the ability of the engraver and, let's face it, the name of the engraver, which will determine a price a customer can reasonably expect to pay.
Collectors and aficionados of engraving will pay an astronomical amount of money for a Mckenzie or Churchill practice plate! What's a practice plate worth. Nothing. The value of that plate,is in, who engraved it.
There are quite a few engravers on this site who could command that type of consideration for the work that they produce. They know who they are.
I've got an old Zippo kicking around here somewhere, but to have it engraved by certain people, I would reasonably expect to pay BIG money.
Just my thoughts on the matter.

Betley Park said:

I'm certainly glad that you asked the question griff! Because I believe that the item to be engraved has absolutely nothing to do with a command of price for work that has been commissioned.
The intrinsic value is wholly in the ability of the engraver and, let's face it, the name of the engraver, which will determine a price a customer can reasonably expect to pay.
Collectors and aficionados of engraving will pay an astronomical amount of money for a Mckenzie or Churchill practice plate! What's a practice plate worth. Nothing. The value of that plate,is in, who engraved it.
There are quite a few engravers on this site who could command that type of consideration for the work that they produce. They know who they are.
I've got an old Zippo kicking around here somewhere, but to have it engraved by certain people, I would reasonably expect to pay BIG money.
Just my thoughts on the matter.

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I thought that the matter at hand was a spec, job, I did not realize that we were speaking about commissioned work or maybe you do not see the difference between the two.

Hello Thierry. To be quite honest, I don't see any difference between the value of spec or commissioned work at all. Initial costs would obviously have to be recouped by the engraver before a graver goes anywhere near the piece. His or her markup on the piece, their call, and what the customer thinks is a fair thing. For me, I would have a Seiko watch engraved as opposed to a Rolex because I could afford the Seiko and not the Rolex. At the end of the day, it is the quality of art in the engraving work that I am really purchasing. The Seiko, or whatever it is, is just a thing to hang it on.
It is possible that the well heeled with the Holland and Holland doubles think differently to me, of course.